Illinois Insurance State Practice Exam

When is a Producer required to submit a written documentation if service fees exceed a specified percentage?

1. When it exceeds 5%

2. When it exceeds 8%

3. When it exceeds 10%

4. When it exceeds 12%

The correct answer is: When it exceeds 10%

A Producer is required to submit written documentation when service fees exceed 10%. This requirement is in place to ensure transparency and consumer protection within the insurance industry. By mandating written documentation at this threshold, it helps maintain ethical practices and allows clients to be fully informed about the fees they are being charged. Such measures encourage accountability among Producers, ensuring that they provide adequate justification for higher service fees, which ultimately benefits the consumer. The specified percentage is set to ensure that consumers are aware of significant fees that may impact their overall costs; thus, documentation becomes necessary to substantiate those charges when they surpass a certain level. Understanding this regulation is crucial for anyone involved in the insurance sector in Illinois, helping them navigate compliance requirements effectively.